International disputes: Greece and Turkey
continue discussions to resolve their complex maritime, air,
territorial, and boundary disputes in the Aegean Sea; Cyprus question
with Turkey; Greece rejects the use of the name Macedonia or Republic
of Macedonia; the mass migration of unemployed Albanians still remains a problem for developed countries, chiefly Greece and Italy.

Geography

Located in southern Europe, Greece forms an
irregular-shaped peninsula in the Mediterranean with two additional large
peninsulas projecting from it: the Chalcidice and the Peloponnese. The
Greek islands are generally subdivided into two groups, according to
location: the Ionian islands (including Corfu, Cephalonia, and Leucas)
west of the mainland and the Aegean islands (including Euboea, Samos,
Chios, Lesbos, and Crete) to the east and south. North-central Greece,
Epirus, and western Macedonia are all mountainous. The main chain of the
Pindus Mountains extends from northwest Greece to the Peloponnese. Mount
Olympus, rising to 9,570 ft (2,909 m), is the highest point in the
country.

Government

Parliamentary republic.

History

Indo-European peoples, including the Mycenaeans,
began entering Greece about 2000 B.C. and set
up sophisticated civilizations. About 1200 B.C., the Dorians, another Indo-European people,
invaded Greece, and a dark age followed, known mostly through the Homeric
epics. At the end of this time, classical Greece began to emerge (c. 750
B.C.) as a loose composite of city-states with
a heavy involvement in maritime trade and a devotion to art, literature,
politics, and philosophy. Greece reached the peak of its glory in the 5th
century B.C., but the Peloponnesian War
(431–404 B.C.) weakened the nation, and
it was conquered by Philip II and his son Alexander the Great of
Macedonia, who considered themselves Greek. By the middle of the 2nd
century B.C., Greece had declined to the status
of a Roman province. It remained within the eastern Roman Empire until
Constantinople fell to the Crusaders in 1204. In 1453, the Turks took
Constantinople and by 1460, Greece was a province in the Ottoman Empire.
The Greek war of independence began in 1821, and by 1827 Greece won
independence with sovereignty guaranteed by Britain, France, and
Russia.

The protecting powers chose Prince Otto of
Bavaria as the first king of modern Greece in 1832 to reign over an area
only slightly larger than the Peloponnese peninsula. Chiefly under the
next king, George I, chosen by the protecting powers in 1863, Greece
acquired much of its present territory. During his 57-year reign, a period
in which he encouraged parliamentary democracy, Thessaly, Epirus,
Macedonia, Crete, and most of the Aegean islands were added from the
disintegrating Turkish empire. Unfavorable economic conditions forced
about one-sixth of the entire Greek population to emigrate (mostly to the
U.S.) in the late 19th and early 20th centuries. An unsuccessful war
against Turkey after World War I brought down the monarchy, which was
replaced by a republic in 1923.

Greece Mired in Long Civil War

Two military dictatorships and a financial
crisis brought back the exiled king, George II, but only until 1941, when
Italian and German invaders overcame tough Greek resistance. After British
and Greek troops liberated the country in Oct. 1944, Communist guerrillas
staged a long military campaign against the government; the Greek civil
war, infamous for its brutality, began in Dec. 1944 and continued until
Oct. 16, 1949, when the Communist guerrillas conceded defeat. The Greek
government received U.S. aid under the Truman Doctrine, the predecessor of
the Marshall Plan, to fight against the Communists.

Greece was a charter member of the UN and became
a member of the North Atlantic Treaty Organization (NATO) in 1951. A
military junta seized power in April 1967, sending young King Constantine
II into exile. Col. George Papadopoulos, a leader of the junta, gradually
attempted to modify his hard-line right-wing image. A coup ousted
Papadopoulos in Nov. 1973.

End of Monarchy Brings Civilian Government

A referendum in Dec. 1974, five months after the
demise of the military dictatorship, ended the Greek monarchy and
established a republic. Former premier Karamanlis returned from exile to
become premier of Greece's first civilian government since 1967. Greece
has continued to be ruled by freely elected civilian governments ever
since. On Jan. 1, 1981, Greece became the 10th member of the European
Union. Andreas Papandreou, son of former premier George Papandreou,
founded the Panhellenic Socialist Movement (PASOK) and became Greece's
first Socialist premier (1981–1989).

Greece continued to experience tensions with
Turkey over a disputed, unpopulated 10-acre island and over Cyprus, which
is divided into Greek and Turkish sectors.

The pro-Western Socialist prime minister Kostas
Simitis (1996–2004) was credited with reviving the Greek economy.
Still, The Economist magazine estimated in 2001 that it would be at
least another 15 years before the per capita GDP in Greece comes close to
the current EU average.

Government Focuses on Hosting Successful Olympics

In the summer of 2002, the government was
finally able to crack down on the 17 November (17N) terrorist
organization, which had eluded the Greek authorities for the previous 27
years. The radical leftist group was responsible for more than 20 murders
of diplomats and businessmen. In parliamentary elections in March 2004,
the conservative New Democracy Party swept to power, defeating Pasok, the
ruling Socialist Party. The new prime minister, Kostas Karamanlis, vowed
to deliver a successful and safe Olympics (Greece had been criticized for
being lax on terrorism), and, in spite of last-minute construction, the
Athens Olympics was widely hailed as a triumph.

Some 220 separate fires ravaged the Greek
countryside and threatened ancient Olympic sites around Athens in late
August 2007. At least 60 people died and more than half a million acres
were destroyed in the blazes. Prime Minister Karamantis faced criticism
over the country's response to the devastating blazes. The anger did not
carry over to the polls, however, as Karamantis was reelected to a second
term in September. His center-right party, New Democracy, won 42.6% of the
vote in parliamentary elections, defeating the Panhellenic Socialist
Movement (PASOK), headed by George Papandreou.

Violent protests and riots in several Greek
cities followed the death of a 15-year-old boy who was shot on December 6,
2008, by a police officer in Athens. The policeman was charged with
premeditated manslaughter. Though the riots were sparked by the killing,
they were also in protest of the government's economic policies. A general
strike coincided with the protests and crippled transportation systems,
banks, and schools throughout Greece. The violence was the worst Greece
has experienced in years.

the current EU average.

EU, IMF Bail Out Greece During Debt Crisis

The opposition Socialist party, the Pan Hellenic Socialist Movement (Pasok), won a resounding victory in elections in October 2009. George Papandreou, the leader of Pasok since 2004, became prime minister. A former foreign minister, Papandreou immediately faced a public financial crisis that caused fear that the country might default on its debt. Indeed, the government acknowledged that Greece's deficit had risen to 12.7% of GDP, much higher than the 3.7% reported by the previous administration. The situation prompted Papandreou, whose father and grandfather also served as prime ministers, to make deep spending cuts, crack down on tax evasion, and increase fuel prices.

In April 2010, shortly after Papandreou requested a $60 billion bailout package from the European Union and the International Monetary Fund, Standard & Poor's downgraded Greece's bond rating to junk status, a move that caused further fear that the country would default on its debt. Germany balked at the aid package without promises of strict austerity measures from Greece. While Germany stalled, the needed amount of assistance ballooned. In early May, Greece agreed to implement deep cuts to its social services, crack down on corruption, increase the retirement age, and other measures in exchange for $146 billion in aid, which will be distributed over three years. Protests broke out over the cuts, and three people were killed when a bank was set on fire. The protests quickly waned, and by the end of the summer Greece had met the economic benchmarks set by the IMF and thus qualified for the next round of aid.

Increased pressure on the euro and a still-deteriorating financial situation led to a second bailout package in 2011. In July, the "troika"—the EU, the European Central Bank, and the International Monetary Fund—agreed on a 109 billion euro ($157 billion) rescue package for Greece to address the country's financial woes. The package, however, was not sufficient to stem the recession and Greece continued to miss deficit-reduction goals and default seemed imminent. In September, in an attempt to reduce the deficit and secure another round of aid, Parliament passed a new property tax that was resoundingly criticized by the opposition and the public. Another round of austerity measures, including wage and job reductions, was introduced in late October and met with mass protests that turned violent.

In late October after protracted negotiations, the leaders of the euro zone agreed on a package meant to bring the debt crisis under control. The terms included forcing banks to take a 50% cut in the value of Greek debt and raise new capital to protect them from future defaults, increasing the euro-zone's bail-out fund to $1.4 trillion, further deep and painful austerity measures in Greece, and a reduction of Greece's debt to 120% of its GDP by 2020. Many Greek citizens and politicians condemned the deal out of frustration over Germany and France's continued influence over Greece's affairs. Days after the deal, Prime Minister Papandreou unexpectedly announced a referendum on the deal in an apparent attempt to boost his quickly waning popularity and to give voters an opportunity to weigh in on the plan and its attendant austerity measures. The move rankled several European leaders and members of the opposition and revealed a split within his governing Socialist party. Papandreou backtracked and called off the referendum after Antonis Samaras, leader of the opposition New Democracy Party, said the party would support the bailout package. Papandreou emerged badly scarred from the turmoil, but he survived a confidence vote in Parliament on November 4. Two days later, he announced the formation of a transitional unity government to manage implementation of the package and that he would resign after the country held early elections. Lucas Papademos, a former vice-president of the European Central Bank, was named as Papandreou's successor.

According to European Union statistics, Greece's debt increased to 159.1% of GDP during the third quarter of 2011, up 20% from the same period in 2010. In February 2012, parliament passed another round of stringent austerity measures, including a 22% cut to the minimum wage and the elimination of 150,000 government jobs, which was necessary to receive a second bail-out from the European Union worth $170 billion. However, before Greece can receive the money, it must first pay off creditors. The cuts went through despite violent protests in Athens on the eve of the vote. Protestors set fire to some 40 buildings in Athens and hurled Molotov cocktails.

Voters Voice Displeasure with Bailout Terms at the Polls

May 2012 Parliamentary elections were a stunning rejection of the terms of the European bailout and threw Greece's political landscape into disarray. Center-right New Democracy won 18.85% of the vote, or 108 out of 300 seats, a sharp decline from 34% in 2009. The Socialists (Pasok), who long held control of Parliament, won only 13% percent, down from 44% in 2009.

The far-left party, Syriza, which strongly opposed the terms of the EU bailout, provided the biggest shock of the election, taking 16%—52 seats. In addition, the far-right Golden Dawn party garnered nearly 7% and will be seated in Parliament for the first time, with 21 seats. New Democracy and the Socialists (Pasok), however, failed to form a coalition, and President Papoulias asked Syriza leader Alexis Tsipras to form a government. He said he would not form a government with New Democracy or Pasok unless they withdraw their backing of the bailout deal, and new elections were scheduled for mid-June. President Papoulias named Judge Panagiotis Pikrammenos as interim prime minister. Amid the uncertainty fear spread across Europe that Greece would abandon the euro—and the bailout package.

New Democracy prevailed in June's election, winning 29.7% of the vote. Syriza took 26.9%, and Pasok placed well behind with 12.3%. New Democracy formed a coalition with Pasok and the Democratic Left, and Antonis Samaras, the leader of New Democracy, was sworn in as prime minister. Samaras, who has been cool to the austerity measures and has advocated a course of growth rather than cuts, said he plans to renegotiate some of the terms of the country's bail-out packages.

Samaras succeeded in convincing the European Commission, the European Central Bank, and the International Monetary Fund, referred to as the troika, that the austerity measures were not working and were making life intolerable for many Greeks. Nevertheless, the prime minister was forced to introduce another round of cuts in the fall in order to receive the next installment of aid—and remain in the euro zone. In September, members of the troika rejected his proposed €11.5 billion in cuts, but later accepted an austerity package approved by parliament in October that included €13.5 billion in cuts to pensions and salaries while also increasing taxes. The troika said it would allow Greece to phase in the measures rather than implement them all at once. The concession did little to appease the public, and Samaras's popularity began to plummet while Syriza and Golden Dawn began to gain favorability in the polls. In November, eurozone finance ministers and the IMF agreed to a plan to restructure Greece's debt and release €34.4 billion in aid to Greece. Officials hoped the move would reduce the risk that Greece would abandon the euro.

In June 2013 in its continued pursuit of ways to save money, the government made the surprise announcement that it was suspending operations of the state broadcaster, ERT. Protests broke out, and the Democratic Left party bolted from Samaras's coalition, leaving him with a slim majority in parliament.

Parliament agreed to yet additional austerity measures in July in order to receive the next installment of bailout funds—$8.9 billion. The concessions included the elimination of 15,000 civil service positions and reform to the country's tax code.

Political and Economic Woes Take a Toll

In Sept. 2013, the anti-racist rapper Pavlos Fissas was stabbed and killed by a supporter of the neo-Nazi party Golden Dawn. The subsequent shooting of two Golden Dawn members in early November looked to be an act of retaliation. Many in Greece worried that six years of recession, unrelenting austerity measures, and soaring unemployment would send the country into a violent tailspin.

Less than one week later, on Nov. 6, at least 15,000 belonging to Greece's largest public and private sector unions, including teachers, doctors, transportation workers, and municipal employees participated in a 24-hour general walkout. Many strikers stayed home due to heavy rains. The groups were protesting the arrival of inspectors from the "troika" of the European Commission, the European Central Bank, and the International Monetary Fund.

On Tuesday, April 1, 2014, the troika review period was finally, and officially, over. International finance ministers agreed to release 8.3 billion ($11.4 billion) in loans to ensure Greece's return to solvency.

Early elections were called in December 2014, after Parliament failed three times to elect a president. Stavros Dimas, former European commissioner and the candidate put forth by the government, fell short each time. Voters expressed their anger about the harsh austerity measures, which were put in place by the European Commission, the European Central Bank, and the International Monetary Fund, at the polls in January 2015, handing a decisive victory to the left-wing, anti-austerity Syriza party. Alexis Tsipras, the head of Syriza, became prime minister and said he would renegotiate payment terms of Greece's debt. He referred to the austeriay plan as "fiscal waterboarding." Just shy of winning a majority in Parliament, Syriza formed a coalition with the cente-right Independent Greeks party.